New Delhi, Dec 9 (PTI) Gold prices declined by Rs 1,000 to Rs 1,31,600 per 10 grams in the national capital on Tuesday, tracking a muted demand in the local markets, according to the All India Sarafa Association.

Analysts said traders stayed cautious ahead of the US Federal Reserve's policy meeting announcement also weighed on the sentiment.

The precious metal of 99.9 per cent purity had finished at Rs 1,32,600 per 10 grams on Monday.

"Gold traded lower on Tuesday but remained within a confined range as market participants remained cautious ahead of the highly anticipated FOMC policy decision," Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.

He added that with a rate cut largely factored in, investors' focus has now shifted to the policy statement and Federal Reserve Chair Jerome Powell's press conference for insights on the future direction of monetary policy, which could influence the trend for the US dollar and bullion prices.

In tandem with gold, silver prices also slumped by Rs 4,500 to Rs 1,80,500 per kilogram (inclusive of all taxes) from the previous close of Rs 1,85,000 per kg, as per the association.

In the international markets, spot gold rose by USD 14.83, or 0.35 per cent, to USD 4,205.57 per ounce.

"Spot gold prices were trading at USD 4,200 per ounce, as it continues to consolidate ahead of the FOMC monetary policy decision due on Wednesday," Praveen Singh, Research Analyst at Mirae Asset ShareKhan, said.

He added that downside pressure on commodities is emerging from surging global bond yields amid fiscal and inflation concerns. US Treasury yields have jumped to multi-month highs as the government prepares to issue USD 119 billion worth of bonds this week.

Investors are also awaiting the JOLTS job openings data later in the day for further cues on the Federal Reserve's (Fed) policy stance, Singh said.

Spot silver was trading 0.75 per cent higher at USD 58.59 per ounce in the overseas trade.

"Silver prices are stable, supported by risk aversion and anticipation of a 25 basis points rate drop by the Fed at its meeting on December 9-10," Renisha Chainani, Head - Research at Augmont, said.

Chainani further stated that traders will closely track the Fed's economic projections (Dot plot) and comments from Powell for clarity on the central bank's outlook for 2026 and beyond. PTI HG HG SHW

Gold and silver prices fell ahead of the Fed policy decision as markets weighed rate-cut expectations and bond yield pressures. Gold fell Rs 1,000 to Rs 1,31,600 per 10 grams and silver fell Rs 4,500 to Rs 1,80,500 per kg as markets awaited the US Federal Reserve's policy decision. Traders focused on the Fed statement and Chair Powell's remarks because anticipated monetary easing and shifting US Treasury yields-driven by large bond issuance and fiscal/inflation concerns-could influence the US dollar and bullion prices.